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Tech giants offer empty apologies because users can’t quit

A true apology consists of a sincere acknowledgement of wrong-doing, a show of empathic remorse for why you wronged and the harm it caused, and a promise of restitution by improving ones actions to make things right. Without the follow-through, saying sorry isn’t an apology, it’s a hollow ploy for forgiveness.
That’s the kind of “sorry” we’re getting from tech giants — an attempt to quell bad PR and placate the afflicted, often without the systemic change necessary to prevent repeated problems. Sometimes it’s delivered in a blog post. Sometimes it’s in an executive apology tour of media interviews. But rarely is it in the form of change to the underlying structures of a business that caused the issue.
Intractable Revenue
Unfortunately, tech company business models often conflict with the way we wish they would act. We want more privacy but they thrive on targeting and personalization data. We want control of our attention but they subsist on stealing as much of it as possible with distraction while showing us ads. We want safe, ethically built devices that don’t spy on us but they make their margins by manufacturing them wherever’s cheap with questionable standards of labor and oversight. We want groundbreaking technologies to be responsibly applied, but juicy government contracts and the allure of China’s enormous population compromise their morals. And we want to stick to what we need and what’s best for us, but they monetize our craving for the latest status symbol or content through planned obsolescence and locking us into their platforms.

The result is that even if their leaders earnestly wanted to impart meaningful change to provide restitution for their wrongs, their hands are tied by entrenched business models and the short-term focus of the quarterly earnings cycle. They apologize and go right back to problematic behavior. The Washington Post recently chronicled a dozen times Facebook CEO Mark Zuckerberg has apologized, yet the social network keeps experiencing fiasco after fiasco. Tech giants won’t improve enough on their own.
Addiction To Utility
The threat of us abandoning ship should theoretically hold the captains in line. But tech giants have evolved into fundamental utilities that many have a hard time imagining living without. How would you connect with friends? Find what you needed? Get work done? Spend your time? What hardware or software would you cuddle up with in the moments you feel lonely? We live our lives through tech, have become addicted to its utility, and fear the withdrawal.
If there were principled alternatives to switch to, perhaps we could hold the giants accountable. But the scalability, network effects, and aggregation of supply by distributors has led to near monopolies in these core utilities. The second-place solution is often distant. What’s the next best social network that serves as an identity and login platform that isn’t owned by Facebook? The next best premium mobile and PC maker behind Apple? The next best mobile operating system for the developing world beyond Google’s Android? The next best ecommerce hub that’s not Amazon? The next best search engine? Photo feed? Web hosting service? Global chat app? Spreadsheet?
Facebook is still growing in the US & Canada despite the backlash, proving that tech users aren’t voting with their feet. And if not for a calculation methodology change, it would have added 1 million users in Europe this quarter too.
One of the few tech backlashes that led to real flight was #DeleteUber. Workplace discrimination, shady business protocols, exploitative pricing and more combined to spur the movement to ditch the ridehailing app. But what was different here is that US Uber users did have a principled alternative to switch to without much hassle: Lyft. The result was that “Lyft benefitted tremendously from Uber’s troubles in 2018” eMarketer’s forecasting director Shelleen Shum told the USA Today in May. Uber missed eMarketer’s projections while Lyft exceeded them, narrowing the gap between the car services. And meanwhile, Uber’s CEO stepped down as it tried to overhaul its internal policies.
This is why we need regulation that promotes competition by preventing massive mergers and giving users the right to interoperable data portability so they can easily switch away from companies that treat them poorly
But in the absence of viable alternatives to the giants, leaving these mainstays is inconvenient. After all, they’re the ones that made us practically allergic to friction. Even after massive scandals, data breaches, toxic cultures, and unfair practices, we largely stick with them to avoid the uncertainty of life without them. Even Facebook added 1 million monthly users in the US and Canada last quarter despite seemingly every possible source of unrest. Tech users are not voting with their feet. We’ve proven we can harbor ill will towards the giants while begrudgingly buying and using their products. Our leverage to improve their behavior is vastly weakened by our loyalty.
Inadequate Oversight
Regulators have failed to adequately step up either. This year’s congressional hearings about Facebook and social media often devolved into inane and uninformed questioning like how does Facebook earn money if its doesn’t charge? “Senator, we run ads” Facebook CEO Mark Zuckerberg said with a smirk. Other times, politicians were so intent on scoring partisan points by grandstanding or advancing conspiracy theories about bias that they were unable to make any real progress. A recent survey commissioned by Axios found that “In the past year, there has been a 15-point spike in the number of people who fear the federal government won’t do enough to regulate big tech companies — with 55% now sharing this concern.”

Regulation could protect Facebook, not punish it

When regulators do step in, their attempts can backfire. GDPR was supposed to help tamp down on the dominance of Google and Facebook by limiting how they could collect user data and making them more transparent. But the high cost of compliance simply hindered smaller players or drove them out of the market while the giants had ample cash to spend on jumping through government hoops. Google actually gained ad tech market share and Facebook saw the littlest loss while smaller ad tech firms lost 20 or 30 percent of their business.
Europe’s GDPR privacy regulations backfired, reinforcing Google and Facebook’s dominance. Chart via Ghostery, Cliqz, and WhoTracksMe.
Even the Honest Ads act, which was designed to bring political campaign transparency to internet platforms following election interference in 2016, has yet to be passed even despite support from Facebook and Twitter. There’s hasn’t been meaningful discussion of blocking social networks from acquiring their competitors in the future, let alone actually breaking Instagram and WhatsApp off of Facebook. Governments like the U.K. that just forcibly seized documents related to Facebook’s machinations surrounding the Cambridge Analytica debacle provide some indication of willpower. But clumsy regulation could deepen the moats of the incumbents, and prevent disruptors from gaining a foothold. We can’t depend on regulators to sufficiently protect us from tech giants right now.
Our Hope On The Inside
The best bet for change will come from the rank and file of these monolithic companies. With the war for talent raging, rock star employees able to have huge impact on products, and compensation costs to keep them around rising, tech giants are vulnerable to the opinions of their own staff. It’s simply too expensive and disjointing to have to recruit new high-skilled workers to replace those that flee.
Google declined to renew a contract with the government after 4000 employees petitioned and a few resigned over Project Maven’s artificial intelligence being used to target lethal drone strikes. Change can even flow across company lines. Many tech giants including Facebook and Airbnb have removed their forced arbitration rules for harassment disputes after Google did the same in response to 20,000 of its employees walking out in protest.
Thousands of Google employees protested the company’s handling of sexual harassment and misconduct allegations on Nov. 1.
Facebook is desperately pushing an internal communications campaign to reassure staffers it’s improving in the wake of damning press reports from the New York Times and others. TechCrunch published an internal memo from Facebook’s outgoing VP of communications Elliot Schrage in which he took the blame for recent issues, encouraged employees to avoid finger-pointing, and COO Sheryl Sandberg tried to reassure employees that “I know this has been a distraction at a time when you’re all working hard to close out the year — and I am sorry.” These internal apologizes could come with much more contrition and real change than those paraded for the public.
And so after years of us relying on these tech workers to build the product we use every day, we must now rely that will save us from them. It’s a weighty responsibility to move their talents where the impact is positive, or commit to standing up against the business imperatives of their employers. We as the public and media must in turn celebrate when they do what’s right for society, even when it reduces value for shareholders. If apps abuse us or unduly rob us of our attention, we need to stay off of them.
And we must accept that shaping the future for the collective good may be inconvenient for the individual. There’s an oppprtunity here not just to complain or wish, but to build a social movement that holds tech giants accountable for delivering the change they’ve promised over and over.

For more on this topic:

Internal Facebook memo sees outgoing VP of comms Schrage take blame for hiring Definers

The real threat to Facebook is the Kool-Aid turning sour

Google walkout organizers aren’t satisfied with CEO’s response

Facebook and the endless string of worst-case scenarios

Tech giants offer empty apologies because users can’t quit

Xiaomi gobbles up selfie phone brand Meitu as revenue jumps 49%

Xiaomi is diversifying into a new range of phones as the Chinese smartphone maker announced impressive growth with its latest financials.
The company announced it will take over selfie app maker Meitu’s smartphone business to go after new demographics, particularly women, while it lodged impressive 49 percent revenue growth in Q3.
Xiaomi posted a net profit of 2.481 billion RMB ($357 million) for the quarter on total sales of 50.846 billion RMB ($7.3 billion). The bulk of that income came from smartphones sales — 35 billion RMB, $5 billion — as Xiaomi surpassed its annual target of 100 million shipments with two months of the year still to go. The majority of those phones are sold in China, but the company said that international revenue overall was up by 113 percent year-on-year.
The company has ventured into Europe this year, with its most recent launch in the UK this month, but now it is taking aim at a more diverse set of customers in the Chinese market through this tie-in with Meitu. Best known for its ‘beautification’ selfie apps, Meitu also sells smartphones that tap its selfie brand with optimized cameras and advanced editing features.
Now Xiaomi is taking over that business through a partnership that will see Meitu paid 10 percent of the profits for all devices sold, with a minimum guaranteed fee of $10 million per year. For other smart products, its cut increases to 15 percent.
Meitu is hardly a mainstream phone brand. Its first device launched in 2013 and it has sold 3.5 million units to date. Recently, the company cut back on its hardware — it has launched just one device this year compared to five last year — while the average sell price of its devices has fallen, causing it to forecast a net loss of up to 1.2 billion RMB (or $173 million) up from just 197 million RMB last year. Shifting the heavy-lifting to Xiaomi makes a lot of sense — despite its total cut of sales dropping to just 10 percent, Xiaomi has impressive reach and a sales platform that already features third-party hardware.
Back to Xiaomi, these results are its first ‘true’ financials since the company went public through a Hong Kong IPO back in July. It posted a $2.1 billion profit in the previous quarter but a large chunk of spending and revenue was down to the listing.

Xiaomi gobbles up selfie phone brand Meitu as revenue jumps 49%

FCC approval of Europe’s Galileo satellite signals may give your phone’s GPS a boost

The FCC’s space-focused meeting today had actions taken on SpaceX satellites and orbital debris reduction, but the decision most likely to affect users has to do with Galileo . No, not the astronomer — the global positioning satellite constellation put in place by the E.U. over the last few years. It’s now legal for U.S. phones to use, and a simple software update could soon give your GPS signal a major bump.
Galileo is one of several successors to the Global Positioning System that’s been in use since the ’90s. But because it is U.S.-managed and was for a long time artificially limited in accuracy to everyone but U.S. military, it should come as no surprise that European, Russian and Chinese authorities would want their own solutions. Russia’s GLONASS is operational and China is hard at work getting its BeiDou system online.
The E.U.’s answer to GPS was Galileo, and the 26 (out of 30 planned) satellites making up the constellation offer improved accuracy and other services, such as altitude positioning. Test satellites went up as early as 2005, but it wasn’t until 2016 that it began actually offering location services.
A Galileo satellite launch earlier this year.
Devices already existed that would take advantage of Galileo signals — all the way back to the iPhone 6s, the Samsung Galaxy S7 and many others from that era forward. It just depends on the wireless chip inside the phone or navigation unit, and it’s pretty much standard now. (There’s a partial list of smartphones supporting Galileo here.)
When a company sells a new phone, it’s much easier to just make a couple million of the same thing rather than make tiny changes like using a wireless chipset in U.S. models that doesn’t support Galileo. The trade-off in savings versus complexity of manufacturing and distribution just isn’t worthwhile.
The thing is, American phones couldn’t use Galileo because the FCC has regulations against having ground stations being in contact with foreign satellites. Which is exactly what using Galileo positioning is, though of course it’s nothing sinister.
If you’re in the U.S., then, your phone likely has the capability to use Galileo but it has been disabled in software. The FCC decision today lets device makers change that, and the result could be much-improved location services. (One band not very compatible with existing U.S. navigation services has been held back, but two of the three are now available.)
Interestingly enough, however, your phone may already be using Galileo without your or the FCC’s knowledge. Because the capability is behind a software lock, it’s possible that a user could install an app or service bringing it into use. Perhaps you travel to Europe a lot and use a French app store and navigation app designed to work with Galileo and it unlocked the bands. There’d be nothing wrong with that.

Or perhaps you installed a custom ROM that included the ability to check the Galileo signal. That’s technically illegal, but the thing is there’s basically no way for anyone to tell! The way these systems work, all you’d be doing is receiving a signal illegally that your phone already supports and that’s already hitting its antennas every second — so who’s going to report you?
It’s unlikely that phone makers have secretly enabled the Galileo frequencies on U.S. models, but as Commissioner Jessica Rosenworcel pointed out in a statement accompanying the FCC action, that doesn’t mean it isn’t happening:
If you read the record in this proceeding and others like it, it becomes clear that many devices in the United States are already operating with foreign signals. But nowhere in our record is there a good picture of how many devices in this country are interacting with these foreign satellite systems, what it means for compliance with our rules, and what it means for the security of our systems. We should change that. Technology has gotten ahead of our approval policies and it’s time for a true-up.
She isn’t suggesting a crackdown — this is about regulation lagging behind consumer tech. Still, it is a little worrying that the FCC basically has no idea, and no way to find out, how many devices are illicitly tuning in to Galileo signals.
Expect an update to roll out to your phone sometime soon — Galileo signals will be of serious benefit to any location-based app, and to public services like 911, which are now officially allowed to use the more accurate service to determine location.

FCC approval of Europe’s Galileo satellite signals may give your phone’s GPS a boost

Google tweaks Android licensing terms in Europe to allow Google app unbundling — for a fee

Google has announced changes to the licensing model for its Android mobile operating system in Europe,  including introducing a fee for licensing some of its own brand apps, saying it’s doing so to comply with a major European antitrust ruling this summer.
In July the region’s antitrust regulators hit Google with a recordbreaking $5BN fine for violations pertaining to Android, finding the company had abused the dominance of the platform by requiring manufacturers pre-install other Google apps in order to license its popular Play app store. 
Regulators also found Google had made payments to manufacturers and mobile network operators in exchange for exclusively pre-installing Google Search on their devices, and used Play store licensing to prevent manufacturers from selling devices based on Android forks.
Google disputes the Commission’s findings, and last week filed its appeal — a legal process that could take years. But in the meanwhile it’s making changes to how it licenses Android in Europe to avoid the risk of additional penalties heaped on top of the antitrust fine.
Hiroshi Lockheimer, Google’s senior vice president of platforms & ecosystems, revealed the new licensing options in a blog post published today.
Under updated “compatibility agreements”, he writes that mobile device makers will be able to build and sell Android devices intended for the European Economic Area (EEA) both with and without Google mobile apps preloaded — something Google’s same ‘compatibility’ contracts restricted them from doing before, when it was strictly either/or (either you made Android forks, or you made Android devices with Google apps — not both).
“Going forward, Android partners wishing to distribute Google apps may also build non-compatible, or forked, smartphones and tablets for the European Economic Area (EEA),” confirms Lockheimer.
However the company is also changing how it licenses the full Android bundle — which previously required OEMs to load devices with the Google mobile application suite, Google Search and the Chrome browser in order to be able to offer the popular Play Store — by introducing fees for OEMs wanting to pre-load a subset of those same apps under “a new paid licensing agreement for smartphones and tablets shipped into the EEA”.
Though Google stresses there will be no charge for using the Android platform itself. (So a pure fork without any Google services preloaded still wouldn’t require a fee.)
Google also appears to be splitting out Google Search and Chrome from the rest of the Google apps in its mobile suite (which traditionally means stuff like YouTube, the Play Store, Gmail, Google Maps, although Lockheimer’s blog post does not make it clear which exact apps he’s talking about) — letting OEMs selectively unbundle some Google apps, albeit potentially for a fee, depending on the apps in question.
“[D]evice manufacturers will be able to license the Google mobile application suite separately from the Google Search App or the Chrome browser,” is what Lockheimer unilluminatingly writes.
Perhaps Google wants future unbundled Android forks to still be able to have Google Search or Chrome, even if they don’t have the Play store, but it’s really not at all clear which configurations of Google apps will be permitted under the new licensing terms, and which won’t.
“Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA. Android will remain free and open source,” Lockheimer adds, without specifying what the fees will be either. 
“We’ll also offer new commercial agreements to partners for the non-exclusive pre-installation and placement of Google Search and Chrome. As before, competing apps may be pre-installed alongside ours,” he continues to complete his trio of poorly explained licensing changes.
We’ve asked Google to clarify the various permitted and not permitted app configurations, as well as which apps will require a fee (and which won’t), and how much the fees will be, and will update this post with any response.
The devil in all those details should become clear soon though, as Google says the new licensing options will come into effect on October 29 for all new (Android based) smartphones and tablets launched in the EEA.

Google tweaks Android licensing terms in Europe to allow Google app unbundling — for a fee

Make Way For Another European Square: SumUp Launches With $20M+ In Backing

sumup

Add one more to the list of companies going head-to-head in the area of card payments by way of smartphone attachments: today, Berlin-based SumUp is opening up for business in the UK, Germany, Ireland and Austria, backed by an eight-figure Series A round, understood by TechCrunch to be over $20 million.

SumUp’s $20 million Series A investment comes from b-to-v Partners, Shortcut Ventures, Tengelmann Ventures and Klaus Hommels, the early Skype, Facebook and Xing investor. Before the $20 million round, SumUp had been bootstrapped by its founders, which include Daniel Klein, SumUp’s CEO, who was also one of the founders of PayPal competitor MoneyBookers (later rebranded as Skrill).

Similar to services like like Square, PayPal’s Here, iZettle, mPowa, Payleven and Intuit’s GoPayment, SumUp works by way of a free dongle that attaches to a smartphone or tablet — in its case an Android or iOS device — which can then be used with an app to read cards and take payments. And like the others, SumUp is targeting the large swathe of merchants and small businesses who currently do not have the facilities to take card payments. But if this sounds a little me-too and crowded, it’s clearly a space where investors still see a lot of opportunity for a startup to make a killing.

SumUp estimates that there are some 20 million small businesses in Europe today, but a large part of them are still only able to take payments by cash and checks because of the costs and infrastructure associated with traditional card payment services. Like others in the mobile payment space SumUp is banking on the growing uptake of smartphones — currently 32% penetration in Europe overall — and the increasing reliance on card transactions — they’re growing by 18% annually — to change that.

What is perhaps noteworthy about SumUp is that it is kicking off with a full launch — not a limited beta — in these four countries, with two of them, Germany and the UK, being some of the largest retail markets in Europe. The biggest competitor in Europe, iZettle, has up to now carved out some market share in the Nordics but is still only in beta in the UK; and of course Square and PayPal, the two biggest players in the U.S., have yet to enter the market here — although that seems to be something coming very soon.

[The launch today comes after a four-month closed beta in Germany, the UK, Ireland and Austria, which had been spotted early on by the German blog Deutsche Startups. The company has some 100 employees working in Berlin, Dublin and London.]

SumUp takes a 2.75% cut of every transaction made using its reader. It currently works with MasterCard, Visa and Europay and Stefan Jeschonnek, the MD and another co-founder, says that it’s currently in discussions with other card companies to extend that list.

You may recall that iZettle has been in a pickle in Europe over Visa cutting off its service because of the method iZettle uses to authenticate card users — iZettle requires a signature, which Visa says doesn’t meet its requirements. SumUp also takes signatures for authentication, but only on MasterCard transactions. For Visa customers get sent an SMS with a secure link, which they have to access on their devices to manually enter their full card numbers.

That sounds cumbersome, but Jeschonnek says SumUp is working on another method to speed up that process in future. “We are looking at different technology that we can use, and we are considering the chip-and-PIN solution [used by merchants who have payment terminals],” he says.

Another notable aspect of SumUp’s service is that the company is already developing the idea as more than just a point-of-sale card payment provision. Merchants have the option of using the app to preload several items that they sell, and that effectively turns SumUp into a kind of cash register.

This is, for now, limited to being used within SumUp’s own service, although Jeschonnek says it is also looking at how it might leverage APIs to offer this kind of functionality within merchant’s own apps.

“But right now we’re mainly focused on the problem of getting merchants to take cards,” he says. “We’re trying to solve a problem that still hasn’t been solved.”


Make Way For Another European Square: SumUp Launches With $20M+ In Backing